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Insiders Were the Biggest Winners as MotoMotion China Corporation's (SZSE:301061) Market Cap Grew by CN¥596m Last Week

Simply Wall St ·  Dec 3 06:56

Key Insights

  • Significant insider control over MotoMotion China implies vested interests in company growth
  • 51% of the business is held by the top 4 shareholders
  • Institutions own 11% of MotoMotion China

Every investor in MotoMotion China Corporation (SZSE:301061) should be aware of the most powerful shareholder groups. With 45% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week's 6.6% gain.

In the chart below, we zoom in on the different ownership groups of MotoMotion China.

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SZSE:301061 Ownership Breakdown December 2nd 2024

What Does The Institutional Ownership Tell Us About MotoMotion China?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

MotoMotion China already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see MotoMotion China's historic earnings and revenue below, but keep in mind there's always more to the story.

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SZSE:301061 Earnings and Revenue Growth December 2nd 2024

We note that hedge funds don't have a meaningful investment in MotoMotion China. Xiaoqin Li is currently the largest shareholder, with 43% of shares outstanding. Ningbo Mingming Baibai Enterprise Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 3.9% of common stock, and Changzhou Qingmiao Zhiqi Enterprise Management Consulting Partnership Enterprise (Limited Partnershi holds about 2.1% of the company stock. In addition, we found that Meijun Xu, the CEO has 1.5% of the shares allocated to their name.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of MotoMotion China

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in MotoMotion China Corporation. It has a market capitalization of just CN¥9.6b, and insiders have CN¥4.3b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over MotoMotion China. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 6.0%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand MotoMotion China better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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